Correlation Between Shinil Electronics and Moadata
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Moadata at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shinil Electronics and Moadata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinil Electronics Co and Moadata Co, you can compare the effects of market volatilities on Shinil Electronics and Moadata and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shinil Electronics with a short position of Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Moadata.
Diversification Opportunities for Shinil Electronics and Moadata
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Moadata is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata and Shinil Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shinil Electronics Co are associated (or correlated) with Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Moadata go up and down completely randomly.
Pair Corralation between Shinil Electronics and Moadata
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.43 times more return on investment than Moadata. However, Shinil Electronics Co is 2.34 times less risky than Moadata. It trades about -0.05 of its potential returns per unit of risk. Moadata Co is currently generating about -0.08 per unit of risk. If you would invest 146,100 in Shinil Electronics Co on October 28, 2024 and sell it today you would lose (5,400) from holding Shinil Electronics Co or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Moadata Co
Performance |
| Timeline |
| Shinil Electronics |
| Moadata |
Shinil Electronics and Moadata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Moadata
The main advantage of trading using opposite Shinil Electronics and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Moadata can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Moadata will offset losses from the drop in Moadata's long position.| Shinil Electronics vs. Narae Nanotech Corp | Shinil Electronics vs. Seah Steel Corp | Shinil Electronics vs. DONGKUK STEEL MILL | Shinil Electronics vs. V One Tech Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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